Jason Lentini
07-30-2010, 07:29 AM
Description:
Base salary plus unit bonus (or bonus based on objectives like appointments kept). This option is often coupled with a “fast start” bonus, which means that the BDC personnel (or ISRs) are motivated to meet half of their monthly goal by mid month. When used in a BDC setting, goals usually consist of two parts - # of BDC customers that show up for appointments, and # of BDC customers that purchase. BDC personnel rarely have a bonus based on the customer’s CSI score from the manufacturer since most of the CSI questions rate the experience at the delivery stage.
Example:
A BDC “appointment setter” might receive a base salary of $1,000/month and then earn bonuses when appointments they have set turn into sales for the dealership. These bonuses could be an amount like $50/per sold vehicle, or could be based on goals in a tier such as:
5 – 10 vehicles = $500
11 – 15 vehicles = $1,000
16 – 20 vehicles = $1,500
21 – 30 vehicles = $2,000
31 – 40 vehicles = $2,500
41 – 50 vehicles = $3,000
Since Business Development Representatives have absolutely no control over which customers buy and those that do not, they should also be compensated for appointments that show, but do not purchase. Internet appointments that show should close at a rate approaching 50% while Phone Ups will close at at a lower rate. With this in mind appointment compensation should also be based on a tier, retroactive to the first appointment such as:
11 – 15 appointments = $1.00
16 – 20 appointments = $1.50
21 – 30 appointments = $2.00
31 – 40 appointments = $2.50
41 – 50 appointments = $3.00
etcetera
Note: these vehicle sales ranges and bonus payouts may differ by vehicle brand and the geographic location of the dealership.
In either scenario, a “fast start” bonus can be a great way to kick start the month and keep the stress level in the second half of the month to a minimum. An example for this would be if the above BDC personnel were averaging 15 sales from appointments they have set, and they were to establish a monthly goal to get that to 20 sales through better phone techniques and follow-up. The “fast start” could be an additional $250 on the 15th of the month if they are already at 10+ sales by that time.
Pros: Motivates BDC personnel to focus on setting (and following up with) good solid appointments while providing incentives to start the month off quickly so that goals are more likely to be achieved.
Cons: Complicated and requires more administration than other pay plans. The number of appointments made is often a function of lead volume which likely is out of the BDC person’s control. Similarly, a solid appointment could get “blown out” by an inexperienced or ineffective sales person, affecting the BDC persons Appt to Sale ratio.
Base salary plus unit bonus (or bonus based on objectives like appointments kept). This option is often coupled with a “fast start” bonus, which means that the BDC personnel (or ISRs) are motivated to meet half of their monthly goal by mid month. When used in a BDC setting, goals usually consist of two parts - # of BDC customers that show up for appointments, and # of BDC customers that purchase. BDC personnel rarely have a bonus based on the customer’s CSI score from the manufacturer since most of the CSI questions rate the experience at the delivery stage.
Example:
A BDC “appointment setter” might receive a base salary of $1,000/month and then earn bonuses when appointments they have set turn into sales for the dealership. These bonuses could be an amount like $50/per sold vehicle, or could be based on goals in a tier such as:
5 – 10 vehicles = $500
11 – 15 vehicles = $1,000
16 – 20 vehicles = $1,500
21 – 30 vehicles = $2,000
31 – 40 vehicles = $2,500
41 – 50 vehicles = $3,000
Since Business Development Representatives have absolutely no control over which customers buy and those that do not, they should also be compensated for appointments that show, but do not purchase. Internet appointments that show should close at a rate approaching 50% while Phone Ups will close at at a lower rate. With this in mind appointment compensation should also be based on a tier, retroactive to the first appointment such as:
11 – 15 appointments = $1.00
16 – 20 appointments = $1.50
21 – 30 appointments = $2.00
31 – 40 appointments = $2.50
41 – 50 appointments = $3.00
etcetera
Note: these vehicle sales ranges and bonus payouts may differ by vehicle brand and the geographic location of the dealership.
In either scenario, a “fast start” bonus can be a great way to kick start the month and keep the stress level in the second half of the month to a minimum. An example for this would be if the above BDC personnel were averaging 15 sales from appointments they have set, and they were to establish a monthly goal to get that to 20 sales through better phone techniques and follow-up. The “fast start” could be an additional $250 on the 15th of the month if they are already at 10+ sales by that time.
Pros: Motivates BDC personnel to focus on setting (and following up with) good solid appointments while providing incentives to start the month off quickly so that goals are more likely to be achieved.
Cons: Complicated and requires more administration than other pay plans. The number of appointments made is often a function of lead volume which likely is out of the BDC person’s control. Similarly, a solid appointment could get “blown out” by an inexperienced or ineffective sales person, affecting the BDC persons Appt to Sale ratio.